Scenario: Reginald Owens owns Knight’s Table Party Supply which caters to weddings, receptions, corporate gatherings, and other special occasions. Reginald creates the atmosphere for the occasion and decorates in conjunction with the buyer’s wishes. He is a small company and has one person, Sam, who orders supplies with the company credit card, tracks inventory, delivers decorations, and operates a cash bar for each party. Patricia is Sam’s wife. She was brought onboard to create invoices, accept payments, make deposits, and pay vendors. Patricia is also allowed to sign checks if Reginald is not immediately available to do so.
Identify 5 areas where internal controls are needed for Reginald’s business to prosper.
Explain how not initiating action could create financial issues within the company.